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Simple Credit Crunch Solution
1694
Posts: 94 Forumite
The treasury rather than borrow itself into more debt why doesn't it:
Offer a 100% secure govt savings account that offers moderate interest interest BUT has a double platinum titanium guarantee on it, the panicky public will love this more than the modest interest deters them.
By ignoring EU competition laws they can use the already nationalised Northern Rock as the vehicle for this. Many other countries are ignoring the EU directives and doing what is right for there country. That is what governments are elected for to protect the interest of the electorate, not pander to another nations wants. Iceland was an EEA member, but when needs must as times have show!
Use the new savers money as a deposit and then fractional reserve it to 9 times this amount. This will be no more inflationary than the old system where other banks do this, or in fact the old Northern Rock.
Lend the fractional reserve money to the commercial banks to free up their liquidity.
Charge the commercial banks interest at a higher rate than offered to savers. (does it need to do this, as the fractional reserve money is free and 9 times as abundant, could it lend the money cheaply and still make a profit?)
Use the profit interest to pay off the National debt
And save the nation!!!!
The protection limit for commercial banks should gradually be lowered and that of NR gradually increased to allow a steady trickle rather than a flood of those transfering.
Most would transfer there money digitally, The treasury/NR could stipulate it must be electronic. The commercial banks would therefore not face a hard cash run and could continue to get along with there own operations for businesses etc.
The faster payments system exists and could be used to transfer money from commercial banks to NR instantly.
No banks crash, savings are safe, the treasury is in control.
Offer a 100% secure govt savings account that offers moderate interest interest BUT has a double platinum titanium guarantee on it, the panicky public will love this more than the modest interest deters them.
By ignoring EU competition laws they can use the already nationalised Northern Rock as the vehicle for this. Many other countries are ignoring the EU directives and doing what is right for there country. That is what governments are elected for to protect the interest of the electorate, not pander to another nations wants. Iceland was an EEA member, but when needs must as times have show!
Use the new savers money as a deposit and then fractional reserve it to 9 times this amount. This will be no more inflationary than the old system where other banks do this, or in fact the old Northern Rock.
Lend the fractional reserve money to the commercial banks to free up their liquidity.
Charge the commercial banks interest at a higher rate than offered to savers. (does it need to do this, as the fractional reserve money is free and 9 times as abundant, could it lend the money cheaply and still make a profit?)
Use the profit interest to pay off the National debt
And save the nation!!!!
The protection limit for commercial banks should gradually be lowered and that of NR gradually increased to allow a steady trickle rather than a flood of those transfering.
Most would transfer there money digitally, The treasury/NR could stipulate it must be electronic. The commercial banks would therefore not face a hard cash run and could continue to get along with there own operations for businesses etc.
The faster payments system exists and could be used to transfer money from commercial banks to NR instantly.
No banks crash, savings are safe, the treasury is in control.
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Comments
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But the initial money would be coming out of commercial banks.Savings
£14,200 with £1100 M.I.A. presumed dead.0 -
But the initial money would be coming out of commercial banks.
Yes, banks have more than enough digital money on there accounts, afterall look at your bank statement has that gone down? No, the digital money they owe you is still there.
There only problem is lack of paper or coin money if you try and withdraw it physically, if you do it electronically they can easily honour it.0 -
No one else got a single thought?
This will secure your savings without a tax payer funded bailout and will infact reduce taxes (income tax will be almost 0!) and increase the governments ability to spend on public services.
If I have got this theory correct, and therefore it is implemented, this is a huge revoltion that will lead to a new age of prosperity.0 -
Offer a 100% secure govt savings account that offers moderate interest interest BUT has a double platinum titanium guarantee on it, the panicky public will love this more than the modest interest deters them.
National Savings has been around for ages
http://www.nsandi.com/index.jsp0 -
National Savings has been around for ages
http://www.nsandi.com/index.jsp
Yet it is not the kind of account people want. Northern Rock/commercial bank style current accounts are, an account where you can keep you money, pay your bills, write a cheque, standing orders direct debits etc., as evidenced by the fact they have had to close all but one type of longer term account to new applicants.
NI is enjoying a boom too actually. Which furthers my thoughts that this concept has legs.0 -
:rotfl:
Is this part of a long lost Monty Python sketch?
Your right. Me, you and everyone else should leave the thinking about our finances to someone else. I'm sure they will do what's best for us....Oh wait.
Have you even tried to think of a solution to the problem? Or have you sat and watched as debt was heaped upon you, then made a smug comment on the faceless internet about how much debt you just recieved.0 -
Perhapse a better solution would be:
Rather than borrowing for this bailout, why doesn’t the mint print more money and spend it on public services into the economy BUT at the same time raise the fractional reserve requirements of banks (paper money to digital money)in proportion to the new printing to soak up any inflation. As the banks reduce there ratios to 1 2 1 with the new money the system stabilises and we won't be able to reach this position again.
After that over printing by the government, printing more than the value of public sector work done, will raise inflation and the government will face a negative vote as a consequence.0 -
They have already got the best on the market, NS&I index linked.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0
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